ASAE 3610 / AWAS 2

Australian Water Accounting Standard 1 Preparation and Presentation of General Purpose Water Accounting Reports (AWAS 1) requires a general purpose water accounting report to be subjected to assurance to establish whether the report is presented fairly in accordance with that Standard.

AWAS 1 states that a general purpose water accounting report comprises the following components: 

1. Statement of water assets and water liabilities 
2. Statement of changes in water assets and water liabilities^[1][2]
3. Statement of water flows^[3]
4. Note disclosures
5. Accountability statement
6. Contextual statement

This Standard deals with assurance engagements to report on the water accounting statements, note disclosures and the accountability statement only. It does not cover the contextual statement, which is not subject to assurance. However, the assurance practitioner reads the contextual statement to identify material inconsistencies, if any, with the other components of the general purpose water accounting report.^[4]
(Ref: Para. 91, A157-A163)

This Standard does not deal with, or provide specific guidance for, assurance engagements to report on the following: Water accounting reports prepared in accordance with special purpose water reporting frameworks. Single components of a general purpose water accounting report or specific elements, accounts or items of a component. Water-related information not included in paragraph 5 of this Standard. This Standard may nonetheless provide guidance that may be useful in conducting such engagements. (Ref: Para. A1)

Attestation and Direct Engagements

The Framework for Assurance Engagements (Assurance Framework) and ASAE 3000 Assurance Engagements Other than Audits or Reviews of Historical Financial Information (ASAE 3000) note that an assurance engagement may be either an attestation engagement or a direct engagement. This Standard deals only with attestation engagements.^[5]

Procedures for Reasonable Assurance and Limited Assurance Engagements

ASAE 3000 notes that an assurance engagement may be either a reasonable assurance engagement or a limited assurance engagement.^[6] This Standard deals with both reasonable and limited assurance engagements. (See paragraph 15(c) of this Standard)

In both reasonable assurance and limited assurance engagements on a general purpose water accounting report, the assurance practitioner chooses a combination of assurance procedures, which can include: inspection, observation, confirmation, recalculation, re-performance, analytical procedures and enquiry. Determining  the assurance procedures  to be performed  on a particular engagement is a matter of professional judgement Because general purpose water accounting reports cover a wide range of water report entities, the nature, timing and extent of procedures are likely to vary considerably from engagement to engagement.

Unless otherwise stated, each requirement of this Standard applies to both reasonable and limited assurance engagements.   Because  the level of assurance obtained in a limited assurance engagement is lower than in a reasonable assurance engagement, the procedures the assurance practitioner performs in a limited assurance engagement vary in nature and timing from, and are less in extent than for, a reasonable assurance engagement.7 Requirements that apply to only one or the other type of engagement have been presented in a columnar format with the letter "L" (limited assurance) or "R" (reasonable assurance) after the paragraph number. Although some procedures are required only for reasonable assurance engagements, they may nonetheless be appropriate in some limited assurance engagements (see also paragraph A82 of this Standard, which outlines the primary differences between the assurance practitioner's further procedures for a reasonable assurance engagement and a limited  assurance engagement on a general purpose water accounting report). (Ref: Para. A2, A82)

Relationship with ASAE 3000, Other Pronouncements and Other Requirements

The assurance practitioner is required to comply with ASAE 3000 and this Standard when performing an assurance engagement to report on a general purpose water accounting report. This Standard supplements, but does not replace, ASAE 3000 and expands on how ASAE 3000 is to be applied in an assurance engagement to report on a general purpose water accounting report. (Ref: Para. A14)

Compliance with ASAE 3000 requires, among other things, that the assurance practitioner comply with relevant ethical requirements^[8] related to assurance engagements. It also requires the lead assurance practitioner to be a member of a firm that applies ASQC 1 Quality Control for Firms that Perform Audits and Reviews of Financial Reports and Other Financial Information, Other Assurance Engagements and Related Services Engagements (ASQC 1).^[9][10](Ref: Para. A3-A4)

Where the assurance  engagement is subject to law or regulation, this Standard does not override that law or regulation.  In the event that law or regulation differs from  this Standard, an engagement conducted in accordance with that law or regulation will not automatically comply with this Standard. The assurance practitioner is entitled to represent compliance with  this Standard in addition to compliance with law or regulation only when all applicable requirements of this Standard have been met.

The assurance practitioner shall not represent compliance with this Standard unless the assurance practitioner has complied with the requirements of both this Standard and ASAE 3000. (Ref: Para. A3-A4, A14, A17, A25 and A164)

Skills, Knowledge and Experience

The lead assurance practitioner shall:

1. Have competence in assurance skills and techniques developed through extensive training and practical application, and sufficient competence in the quantification and reporting of water assets, water liabilities and changes in water assets and water liabilities to accept responsibility for the assurance conclusion; and
2. Be satisfied that those persons who are to perform the engagement collectiYely have the appropriate competence and capabilities, including in the quantification and reporting of water assets, water liabilities and changes in water assets and water liabilities, and in assurance, to perform the assurance engagement in accordance with this Standard. (Ref: Para. A15-Al6)

Preconditions for the Engagement

1. 1. 1. 2. Additional information that the assurance practitioner may request from them for the purpose of the engagement; and
         3. Unrestricted access to persons from whom the assurance practitioner determines it necessary to obtain assurance evidence.

If the preconditions for an assurance engagement are not present, the assurance practitioner shall discuss the matter with the engaging party. If changes cannot be made to meet the preconditions, the assurance practitioner shall not accept the engagement as an assurance engagement unless required by law or regulation to do so. However, an engagement conducted under such circumstances does not comply with this Standard or ASAE 3000. Accordingly, the assurance practitioner shall not include any reference within the assurance report to the engagement having been conducted in accordance with this Standard or ASAE 3000.

Agreement on the Terms of the Engagement

The terms of the engagement required to be agreed by ASAE 3000^[14] shall include:(Ref: Para. A25)

1. 1. The objective and scope of the engagement;
   2. The responsibilities of the assurance practitioner;
   3. The responsibilities of the responsible party, including those described in paragraph 18(b);

1. 4. Identification of the applicable criteria for the preparation of the general purpose water accounting report;
   5. Reference to the expected form and content of any reports to be issued by the assurance practitioner and a statement that there may be circumstances in which a report may differ from its expected form and content; and
   6. An acknowledgement that the responsible party agrees to provide \\-Titten representations at the conclusion of the engagement.

ASAE 3000 requires the assurance practitioner to plan and perform the engagement with professional scepticism, recognising that circumstances mat exist that cause the general purpose water accounting report to be materially misstated. ^[15]

ASAE 3000 requires the assurance practitioner to exercise professional judgement in planning and performing an assurance engagement on a general purpose water accounting report, including determining the nature, timing and extent of procedures.^[16]

ASAE 3000 requires the assurance practitioner to apply assurance skills and techniques as part of an iterative, systematic engagement process.^[17]

When planning the engagement as required by ASAE 3000,^[18] the assurance practitioner shall: (Ref: Para. A26-A31)

(a)    Identify the characteristics of the engagement that define its scope;
(b)    Ascertain the reporting objectives of the engagement to plan the timing of the engagement and the nature of the communications required;
(c)    Consider the factors that, in the assurance practitioner's professional judgement, are significant in directing the engagement team's efforts;
(d)    Consider the results of engagement acceptance or continuance procedures
(see paragraphs 17-20) and, where applicable, whether knowledge gained on other engagements performed by the lead assurance practitioner involving the water report entity is relevant;
(e)    Ascertain the nature, timing and extent of resources necessary to perform the engagement, including the involvement of experts and of other assurance practitioners (Ref: Para. A30-A31); and
(f)    Determine the impact of the internal audit function, if any, on the engagement.

Determining Materiality and Performance Materiality When Planning the Engagement

When establishing the overall engagement strategy, the assurance practitioner shall determine materiality for the general purpose water accounting report. (Ref: Para. A32-A40)

The assurance practitioner shall determine performance materiality for purposes of assessing the risks of material misstatement and determining the nature, timing and extent of further procedures.

Revision as the Engagement Progresses

The assurance practitioner shall revise materiality for the general purpose water accounting report in the event of becoming aware of information during the engagement that would have caused the assurance practitioner to have determined a different amount initially. (Ref: Para. A41)

Obtaining an Understanding of the Water Report Entity and Its Circumstances

(a) The nature of the water report entity, inc1uding the physical and administrative aspects of the entity and the water resources being reported.

(b) Industry, regulatory, and other externally-imposed requirements, if any, affecting the operations of the water report entity, including the applicable criteria.

(c) The water management objective and strategy, if any, and associated economic, regulatory, environmental, social, cultural, physical and reputational risks.(Ref: Para. A45)

(i)          The potential for double-counting of water assets and water liabilities in the general purpose water accounting report.

(j)    Whether there is an internal audit function and, if so, its activities and main findings with respect to water accounting and preparation of the general purpose water accounting report.

11. Other relevant internal review functions, their activities and main findings.
    1. Relevant technical and peer reviews.

Procedures to Obtain an Understanding and to Identify and Assess Risks of Material Misstatement

The procedures to obtain an understanding of the water report entity and its circumstances and to identify and assess risks of material misstatement shall include the following: (Ref: Para. A42-A44, A54)

1. 1. Enquiries of those who, in the assurance practitioner's judgement,  have information that is likely to assist in identifying and assessing risks of material misstatement due to fraud or error.
   2. Analytical procedures. (Ref: Para. A55-A57)
   3. Observation and inspection. (Ref: Para. A58-A60)

Obtaining an Understanding of Internal Control

Other Procedures to Obtain an Understanding and to Identify and Assess Risks of Material Misstatement

If the lead assurance practitioner has performed other assurance engagements relating to the water report entity, the lead assurance practitioner shall consider whether information obtained from  those engagements is relevant to identifying  and assessing risks of material misstatement. (Ref: Para. A65)

The assurance practitioner shall make enquiries of the responsible party and others involved in preparing the general purpose water accounting report, as appropriate, to determine whether they have knowledge of any actual, suspected or alleged fraud or non-compliance with law or regulation affecting the general purpose water accounting report. (Ref: Para. A76-A78)

The lead assurance practitioner and other key members of the engagement team, and any key assurance practitioner's external experts, shall discuss the susceptibility of the general purpose water accounting report to material misstatement whether due to fraud or error, and the application of the applicable criteria to the water report entity's facts and circumstances. The lead assurance practitioner shall determine which matters are to be communicated to members of the engagement  team, and to any assurance practitioner's external experts not involved in the discussion.

The assurance practitioner shall evaluate whether the quantification approaches and reporting policies adopted by the responsible party, are appropriate for its operations, and are consistent with the applicable criteria, quantification approaches and reporting policies used in the relevant industry and in prior periods.

Performing Procedures at Other Locations

The assurance practitioner shall determine whether it is necessary in the circumstances of the engagement to perform procedures at other locations, other than where the general purpose water accounting report is prepared. (Ref: Para. A66-A69)

Internal Audit

1. 2. If using the specific work of the internal audit function, determine whether that work is adequate for the purposes of the engagement.

Identifying and Assessing Risks of Material Misstatement

Causes of Risks of Material Misstatement

The assurance practitioner shall design and implement overall responses to address the assessed risks of material misstatement at the general purpose water accounting report level. (Ref: Para. A82-A85)

The assurance practitioner shall design and perform further procedures whose nature, timing and extent are responsive to the assessed risks of material misstatement, having regard to the level of assurance, reasonable or limited, as appropriate. (Ref: Para. A82)

Overall Responses and Further Procedures

Analytical Procedures Performed in Response to Assessed Risks of Material Misstatement

Procedures Regarding Estimates

Procedures Related to the Future Prospects Note

The assurance practitioner shall obtain sufficient appropriate assurance evidence about whether the disclosures in the future prospects note in the general purpose water accounting report: (Ref: Para. A97-A101)

1. Are in accordance with the requirements of AWAS 1; and
2. Are reasonable in the context of AWAS 1.

Procedures Related to Unaccounted-for Differences

Procedures Related to Unaccounted-for Differences

Information Prepared Using the Work of a Management's Expert

If information to be used as assurance evidence has been prepared using the work of a management's expert, the assurance practitioner shall, to the extent necessary having regard to the significance of that expert's work for the purposes of the assurance engagement: (Ref: Para. Al04-AI05)

1. 1. Evaluate the competence, capabilities and objectivity of that expert; (Ref: Para. AI06)
   2. Obtain an understanding of the work of that expert; and (Ref: Para. Al07)
   3. Evaluate the appropriateness of that expert's work as assurance evidence. (Ref: Para. A I 08)

Sampling

When sampling is used, the assurance practitioner shall, when designing the sample, consider the purpose of the procedure and the characteristics of the population from which the sample will be drawn. (Ref: Para. A82(b), A109)

Fraud, Law and Regulation

The assurance practitioner shall respond appropriately to fraud or suspected fraud and non-compliance or suspected non-compliance with law or regulation identified during the engagement. (Ref: Para. AI 10-AI I I)

Procedures Regarding the General Purpose Water Accounting Report Aggregation Process

Additional Procedures

Accumulation of Identified Misstatements

The assurance practitioner shall accumulate misstatements identified during the engagement, other than those that are clearly trivial. (Ref: Para. A116)

Consideration of Identified Misstatements as the Engagement Progresses

The assurance practitioner shall determine whether the overall engagement strategy and engagement plan need to be revised if:

1. The nature of identified misstatements and the circumstances of their occurrence indicate that other misstatements may exist that, when aggregated with misstatements accumulated during the engagement, could be material; or
2. The aggregate of misstatements accumulated during the engagement approaches materiality determined in accordance with paragraphs 25-27 of this Standard.

If, at the assurance practitioner's request, the responsible party has examined a type of water asset or water liability or disclosure and corrected misstatements that were detected, the assurance practitioner shall perform procedures with respect to the work performed by them to determine whether material misstatements remain.

Communication and Correction of Misstatements

The assurance practitioner shall communicate on a timely basis all misstatements accumulated during the engagement with the responsible party and shall request the responsible party to correct those misstatements.

If the responsible party refuses to correct some or all of the misstatements communicated by the assurance practitioner, the assurance practitioner shall obtain an understanding of their reasons for not making the corrections and shall take that understanding into account when forming the assurance practitioner's conclusion.

Evaluating the Effect of Uncorrected Misstatements

Prior to evaluating the effect of uncorrected misstatements, the assurance practitioner shall reassess materiality determined in accordance with paragraphs 25-27 of this Standard to confirm whether it remains appropriate in the context of the general purpose water accounting report.

The assurance practitioner shall determine whether uncorrected misstatements are material, individually or in the aggregate. In making this determination, the assurance practitioner shall consider the size and nature of the misstatements, and the particular circumstances of their occurrence. (See paragraph 99 of this Standard)

Opening Balances

The assurance practitioner shall read the most recent general purpose water accounting report, if any, and the predecessor assurance practitioner's report thereon, if any, for information relevant to opening balances, including disclosures.

The assurance practitioner shall obtain sufficient appropriate assurance evidence about whether the opening balances contain misstatements that materially affect the current period's general purpose water accounting report by: (Ref: Para. AI 17-AI 18)

1. Determining whether the prior period's closing balances have been correctly brought forward to the current period or, when appropriate, have been restated;
2. Determining whether the opening balances reflect the application of appropriate water accounting policies; and
3. Performing one or more of the following:
   1. Where the prior period general purpose water accounting report was assured, reviewing the predecessor assurance practitioner's working papers to obtain evidence regarding the opening balances;
   2. Evaluating whether assurance procedures performed in the current period provide evidence relevant to the opening balances; or

1. 1. 3. Performing specific assurance procedures to obtain evidence regarding the opening balances.

If the prior period general purpose water accounting report was assured by a predecessor assurance practitioner and there was a modification to the conclusion, the assurance practitioner shall evaluate the matter giving rise to the modification in assessing the risks of material misstatement in the current period general purpose water accounting report.

Effect on the Assurance Report

If the assurance practitioner is unable to obtain sufficient, appropriate evidence regarding opening balance , the assurance practitioner shall express a qualified conclusion or disclaim a conclusion on the general purpose water accounting report, as appropriate. (Ref: Para. Al l9-Al20)

If the assurance practitioner concludes that:

1. The opening balances contain a misstatement that materially affects the current period general purpose water accounting report, and the effect of the misstatement is not appropriately accounted for or not adequately presented or disclosed; or
2. The current period water accounting policies are not consistently applied in relation to opening balances in accordance with AWAS 1; or
3. A change in water accounting policies is not appropriately accounted for or not adequately presented or disclosed in accordance with AWAS 1 the assurance practitioner shall express a qualified conclusion or an adverse conclusion, as appropriate.

If the predecessor assurance practitioner's conclusion regarding the prior period general purpose water accounting report included a modification that remains relevant and material to the current  general purpose water accounting report, the assurance practitioner shall modify the assurance practitioner's conclusion on the current period general purpose water accounting report.

When the assurance practitioner intends to use the work of another assurance practitioner, the assurance practitioner shall:

1. Communicate clearly with the other assurance practitioner about the scope and timing of the work and findings of the other assurance practitioner; and (Ref: Para. A121-Al22)
2. Evaluate the sufficiency and appropriateness of evidence obtained and the process for including related information in the general purpose water accounting report. (Ref: Para. Al23)

Determining the Need for an Assurance Practitioner's Expert

If expertise in a field other than water accounting and assurance is necessary to obtain sufficient appropriate assurance evidence, the assurance practitioner shall determine whether to use the work of an assurance practitioner's expert. (Ref: Para. AI24-AI27)

The Competence, Capabilities and Objectivity of the Assurance Practitioner's Expert

The assurance practitioner shall evaluate whether the assurance practitioner's expert has the necessary competence, capabilities and objectivity for the assurance practitioner's purposes. (Ref; Para. Al28-Al29)

The assurance practitioner shall obtain sufficient understanding of the field of expertise of the assurance practitioner's expert to enable the assurance practitioner to determine the nature, scope and objectives of that expert's work for the assurance practitioner's purposes. (Ref: Para. A129(c))

Agreement with the Assurance Practitioner's Expert

1. 4. The need for that expert to observe confidentiality requirements.

Evaluating the Adequacy of the Assurance Practitioner's Expert's Work

The assurance practitioner shall evaluate the adequacy of the assurance practitioner's expert's work for the assurance practitioner's purposes, including: (Ref: Para. Al38-A143)

1. The relevance and reasonableness of that expert's findings or conclusions and their consistency with other assurance evidence;
2. If that expert's work involves assumptions and methods, the relevance and reasonableness of those assumptions and methods in the circumstances; and
3. If that expert's work involves the use of source data that is significant to that expert's work, the relevance, completeness and accuracy of that source data.

If the assurance practitioner determines that the work of the assurance practitioner's expert is not adequate for the assurance practitioner's purposes, the assurance practitioner shall: (Ref; Para. A144)

1. 1. Agree with that expert on the nature and extent off other work to be performed by that expert; or
   2. Perform additional assurance procedures appropriate to the circumstances.

Reference to the Assurance Practitioner's Expert in the Assurance Practitioner's Report

The assurance practitioner shall not refer to the work of an assurance practitioner's expert in an assurance practitioner ' s report unless: (Ref: Para. Al45-AI46)

1. It is required by law or regulation to do so; or
2. Such reference is relevant to an understanding of a modification to the assurance practitioner's conclusion.

If the assurance practitioner makes reference to the work of an assurance practitioner's expert in the assurance practitioner's report, the assurance practitioner shall indicate in that report  that the reference does not reduce the assurance practitioner's responsibility for the assurance practitioner's conclusion.

1. 6. Whether they have disclosed to the assurance practitioner their knowledge of actual, suspected or alleged fraud or non-compliance with law or regulation where the fraud or non-compliance could have a material effect on the general purpose water accounting report.

The date of the written representations shall be as near as practicable to, but not after, the date of the assurance report.

The assurance practitioner shall disclaim a conclusion on the general purpose water accounting report or withdraw from the engagement, where withdrawal is possible under applicable law or regulation, if:

1. The assurance practitioner concludes that there is sufficient doubt about the integrity of the person(s) providing the written representations required by paragraphs 80(a)-80(b) that written representations are not reliable; or
2. 2. The responsible party does not provide the written representations required by paragraphs 80(a)-80(b).

The assurance practitioner shall: (Ref: Para. A148)

1. Consider whether events occurring between the date of the general purpose water accounting report and the date of the assurance report require adjustment of, or disclosure in, the general purpose water accounting report, and evaluate the sufficiency and appropriateness of evidence obtained about whether such events are appropriately reflected in that general purpose water accounting report in accordance with the applicable criteria; and
2. Respond appropriately to facts that become known to the assurance practitioner after the date of the assurance report, that, had they been known to the assurance practitioner at that date, may have caused the assurance practitioner to amend the assurance report.

The assurance practitioner shall determine whether the general purpose water accounting report includes the comparative information required by AWAS 1 and whether such information is appropriately classified. For this purpose, the assurance practitioner shall evaluate whether: (Ref: Para. Al49-Al56)

1. 1. The comparative information agrees with the amounts and other disclosures presented in the prior period or, when appropriate, has been restated; and (Ref: Para. A149)
   2. The water accounting policies reflected in the comparative information are consistent with those applied in the current period or, if there have been changes in water accounting policies, whether those changes have been properly accounted for and adequately presented and disclosed.

If the assurance practitioner becomes aware of a possible material misstatement in the comparative information while performing the current period assurance engagement, the assurance practitioner shall discuss the matter with those person(s) with appropriate responsibilities for, and knowledge of the matters concerned and perform procedures appropriate in the circumstances. (Ref: Para. A150-Al52)

Assurance Reporting and Comparative Information

The assurance practitioner's conclusion shall not refer to the comparative information except in the circumstances described in paragraphs 87, 88 and 90.

1. 1. Refer to both the current period's figures and the corresponding figures in the description of the matter giving rise to the modification when the effects of the matter on the current period's figures are material; or

1. 2. In other cases, explain that the assurance conclusion has been modified because of the effects or possible effects of the unresolved matter on the comparability of the current period's figures and the corresponding figures.

If the assurance practitioner obtains evidence that (Ref: Para. Al SS)

1. a material misstatement exists in the prior period general purpose water accounting report on which an unmodified assurance conclusion has been previously issued; and

1. 2. the comparative figures have not been properly restated or appropriate disclosures have not been made,

the assurance practitioner shall express a qualified conclusion or an adverse conclusion in the assurance report on the current period general purpose water accounting report, modified with respect to the comparative information.

Prior Period General Purpose Water Accounting Report Assured by a Predecessor Assurance Practitioner

If the general purpose water accounting report of the prior period was assured by a predecessor assurance practitioner, and the assurance practitioner is not prohibited  by law or regulation from referring to the predecessor assurance  practitioner's report on the comparative information and decides to do so, the assurance practitioner shall state in an Other Matter paragraph in the assurance report: (Ref: Para. Al56)

1. That the general purpose water accounting report of the prior period was conducted by the predecessor assurance practitioner;

1. 2. The type of conclusion expressed by the predecessor assurance practitioner and, if the conclusion was modified, the reasons therefore; and
   3. The date of that report.

Prior Period General Purpose Water Accounting Report Not Assured

If the prior period general purpose water accounting report was not assured, the assurance practitioner shall state in an Other Matter paragraph in the assurance report that the comparative information is not assured. Such a statement does not, however, relieve the assurance practitioner of the requirement to obtain sufficient appropriate evidence that the opening balances do not contain misstatements that materially affect the current period's general purpose water accounting report.

1. 2. Becomes aware of a material misstatement of fact in that other information that is unrelated to matters appearing in the general purpose water accounting report or the assurance report;

the assurance practitioner shall discuss the matter with the responsible party and take further action as appropriate.

In documenting the nature, timing and extent of procedures performed, the assurance practitioner shall record: (Ref: Para. Al64)

1. The identifying characteristics of the specific iterns or matters tested;
2. Who performed the engagement work and the date such work was completed; and
3. Who reviewed the engagement work performed and the date and extent of such review.

The assurance practitioner shall document discussions of significant matters with the responsible party and others, including the nature of the significant matters discussed, and when and with whom the discussions took place. (Ref: Para. A164)

Quality Control

The assurance practitioner shall include in the engagement documentation:

1. Issues identified with respect to compliance with relevant ethical requirements and how they were resolved;
2. Conclusions on compliance with independence requirements that apply to the engagement, and any relevant discussions with the assurance practitioner's firm that support these conclusions;

1. 3. Conclusions reached regarding the acceptance and continuance of client relationships and assurance engagements; and

1. 4. The nature and scope of, and conclusions resulting from, consultations undertaken during the course of the engagement.

Matters Arising after the Date of the Assurance Report

If, in exceptional circumstances, the assurance practitioner performs new or additional procedures or draws new conclusions after the date of the assurance report, the assurance practitioner shall document: (Ref: Para. A165)

1. The circumstances encountered;

1. 2. The new or additional procedures performed, evidence obtained, and conclusions reached, and their effect on the assurance report; and

1. 3. When and by whom the resulting changes to engagement documentation were made and reviewed.

Assembly of the Final Engagement File

The assurance practitioner shall assemble the engagement documentation in an engagement file and complete the administrative process of assembling the final engagement file on a timely basis after the date of the assurance report. After the assembly of the final engagement file has been completed, the assurance practitioner shall not delete or discard engagement documentation of any nature before the end of its retention period. (Ref: Para. A166)

1. 1. The specific reasons for making them; and
   2. When and by whom they were made and reviewed.

For those engagements, if any, for which a quality control review is required by law or regulation or for which the assurance practitioner's firm has determined that an engagement quality control review is required, the engagement quality control reviewer shall perform an objective evaluation of the significant judgements made by the engagement team, and the conclusions reached in formulating the assurance report. This evaluation shall involve: (Ref: Para. A167)

1. 1. Discussion of significant matters with the lead assurance practitioner, including the engagement team's professional competencies with respect to the quantification and reporting of water assets, water liabilities and changes in water assets and water liabilities, and assurance;
   2. Review of the general purpose water accounting report and the assurance report;
   3. Review of selected engagement documentation relating to the significant judgements the engagement team made and the conclusions it reached; and

1. 4. Evaluation of the conclusions reached in formulating the assurance report and consideration of whether the assurance report is appropriate.

The assurance practitioner shall form a conclusion about whether the assurance practitioner has obtained reasonable or limited assurance, as appropriate, about the water accounting statements, note disclosures and accountability statement included in the general purpose water accounting report. That conclusion shall take into account the requirements of paragraphs 64 and 100-102 of this Standard.

1. 2. Estimates made in preparing the report are reasonable;
   3. The information presented is relevant, reliable, complete, comparable and understandable;
   4. There is adequate disclosure of the applicable criteria, and other matters, including uncertainties, such that intended users can understand the significant judgements made in its preparation; and (Ref: Para. A22, Al 68-Al 70)
   5. The terminology used in the general purpose water accounting report is appropriate.

The evaluation required by paragraph l00L-l00R shall also include consideration of:

1. The overall presentation, structure and content of the general purpose water accounting report; and
2. When appropriate in the context of the criteria, the wording of the assurance conclusion, or other engagement circumstances, whether the general purpose water accounting report represents the underlying water assets and water liabilities, changes in water assets and water liabilities and water flows in a manner that achieves fair presentation.

Emphasis of Matter Paragraphs and Other Matter Paragraphs

1. 1. Draw intended users' attention to a matter presented or disclosed in the general purpose water accounting report that, in the assurance practitioner's judgement, is of such importance that it is fundamental to intended users' understanding of the general purpose water accounting report (an Emphasis of Matter paragraph); or
   2. Communicate a matter other than those that are presented or disclosed in the general purpose water accounting report that, in the assurance practitioner's judgement, is relevant to intended users' understanding of the engagement, the assurance practitioner's responsibilities or the assurance report (an Other Matter paragraph),

the assurance practitioner shall do so in a paragraph in the assurance report, with an appropriate heading, that clearly indicates the assurance practitioner's conclusion is not modified in respect of the matter.

The assurance practitioner shall communicate to those charged with governance the following matters that come to the assurance practitioner's attention during the  course of the engagement, and shall determine whether there is a responsibility to report them to another party(or parties):

1. Deficiencies in internal control that, in the assurance practitioner's professional judgement, are of sufficient importance to merit attention;
2. Identified or suspected fraud; and
3. Matters involving non-compliance with law or regulation, other than when the matters are clearly trivial. (Ref: Para. A79)

Assurance Engagements Covering Information in Addition to the General Purpose Water Accounting Report (Ref: PIITll. 6)

 In some cases, the assurance practitioner may perform an assurance engagement on a report that includes information on water assets and water liabilities, but that information does not comprise a general purpose water accounting report as described in paragraph 15(r) of this Standard. In such cases, this Standard may provide guidance for such an engagement.

Procedures for Reasonable Assurance and Limited Assurance Engagements (Ref: Para. 8-10, A82)

Some procedures that are required only for reasonable assurance engagements may nonetheless be appropriate in some limited assurance engagements. For example, although obtaining an understanding of control activities is not required for limited assurance engagements, in some cases, such as when information is recorded, processed, or reported only in electronic form, the assurance practitioner may nonetheless decide that testing controls, and therefore obtaining an understanding of relevant control activities, is necessary for a limited assurance engagement.

Independence (Ref: Para. 11-12, 16)

Relevant ethical requirements related to assurance engagements^[22] may require a threats and safeguards approach to independence. Compliance with the relevant ethical requirements may potentially be threatened by a broad range of circumstances. Many threats fall into the following categories:

1. Self-interest, for example, undue dependence on total fees from the engaging party or the water report entity.

2. Self-review, for example, performing another service for the engaging party or the water report entity that directly affects the general purpose water accounting report.
3. Advocacy, for example, acting as an advocate on behalf of the engaging party with respect to the interpretation of the applicable criteria.
4. Familiarity, for example, a member of the engagement team ha\·ing a long association, or close or immediate family relationship,  with an employee  of the engaging party who is in a position to exert direct and significant influence over the preparation of the general purpose water accounting report.

5. Intimidation, for example, being pressured to reduce inappropriately the extent of work performed in order to lower fees, or being threatened with withdrawal of the assurance practitioner's registration by a registering authority that is associated with the engaging party's industry group.

Safeguards created by relevant ethical requirements, law or regulation, or safeguards in the work environment, may eliminate or reduce such threats to an acceptable level.

Limited Assurance -A level of assurance that is meaningful (Ref: Para. 15(c)(i)b.)

Across the range of all limited assurance engagements, what is meaningful assurance can vary from just above assurance that is likely to enhance the intended users' confidence about the subject matter information to a degree that is clearly more than inconsequential to just below reasonable assurance. What is meaningful in a particular engagement represents a judgement within that range that depends on the engagement circumstances, including the information needs of intended users as a group, the criteria, and the underlying subject matter of the engagement.

             Because the level of assurance obtained by the assurance practitioner in limited assurance engagements varies, the assurance practitioner's report contains  an informative  summary  of the procedures performed, recognising that an appreciation of the nature, timing, and extent of procedures performed is essential to understanding the assurance practitioner's conclusion (see paragraphs 103(j)(ii) and Al 75-Al 77).

              Some of the factors that may be relevant in determining what constitutes meaningful assurance in a specific engagement include, for example:

1. The characteristics of the underlying subject matter and the criteria.
2. Instructions or other indications from the engaging party about the nature of the assurance the engaging party is seeking the assurance practitioner to obtain. For example, the terms of the engagement may stipulate particular procedures that the engaging party considers necessary or particular aspects of the subject matter information on which the engaging party would like the assurance practitioner to focus procedures.  However, the assurance practitioner may consider that other procedures are required to obtain sufficient appropriate evidence to obtain meaningful assurance.
3. Generally accepted practice, if it exists, with respect to assurance engagements for the particular subject matter information, or similar or related subject matter information.
4. The information needs of intended users as a group. Generally, the greater the consequence to intended users of receiving an inappropriate conclusion when the subject matter is materially misstated, the greater the assurance that would be needed in order to be meaningful to them. For example, in some cases, the consequence to intended users of receiving an inappropriate conclusion may be so great that a reasonable assurance engagement is needed for the assurance practitioner to obtain assurance that is meaningful in the circumstances.
5. The expectation by intended users that the assurance practitioner will form the limited assurance conclusion on the subject matter information within a short timeframe and at a low cost.

Assurance skills and techniques (Ref: Para. 15(f))

6. Systematic documentation practices and assurance report-writing skills.

Criteria (Ref: Para. 15(k))

Suitable criteria are required for reasonably consistent measurement or evaluation of an underlying subject matter within the context of professional judgement. Without the frame of reference provided by suitable criteria, any conclusion is open to individual interpretation and misunderstanding. The suitability of criteria is context-sensitive, that is, it is determined in the context of the engagement circumstances. Even for the same underlying subject matter there can be different criteria, which will yield a different measurement  or evaluation.  The suitability of criteria is not affected by the level of assurance, that is, if criteria are unsuitable for a reasonable assurance engagement, they are also unsuitable for a limited assurance engagement, and vice versa. Suitable criteria include, when relevant, criteria for presentation and disclosure.

Responsible party (Ref: Para. 15(fl))

The responsible party is defined in relation to the preparation and presentation of the general purpose water accounting report.

In many situations, the responsible party will be accountable for both:

1. Preparation and presentation of the general purpose water accounting report in accordance with AWAS 1; and
2. Managing the water assets and water liabilities of the water report entity.

However, in some situations, the responsible party may not be accountable for managing the water assets and water liabilities of the water report entity. For example, the responsible party may be required to prepare a general purpose water accounting report for a river system comprising several rivers and wetlands that are managed by other parties. The responsible party may require information to be provided by the parties that manage the water assets and water liabilities within the river system to assist the responsible party in preparing the general purpose water accounting report. The responsible party may seek representations from the other parties regarding the information provided.

ASAE 3000 includes requirements that apply to assurance engagements (other than audits or reviews of historical financial information), including engagements in accordance with this Standard. In some cases, this Standard may include additional requirements or application material in relation to those topics.

Skills, Knowledge and Experience (Ref: Para. 17)

3. Understanding water resource management instruments, such as water sharing plans, when relevant.
4. Knowledge of applicable law or regulation, if any, that affect how the water assets, water liabilities and changes in water assets and water liabilities of the water report entity should be reported.
5. Quantification and measurement methodologies for water assets, water liabilities and changes in water assets and water liabilities, including the associated scientific and estimation uncertainties, and alternative methodologies available.

The complexity of assurance engagements with respect to a general purpose water accounting report varies. In some cases, the engagement  may be relatively straightforward, for instance, an assurance engagement involving a water report entity restricted to only water rights (i.e. no physical flows of water). In this case, the engagement  may focus largely on the systems used to record and process any changes to the water rights portfolio (i.e. water made available from annual allocations or used, as measured by meters and shown in water consumption figures identified on invoices). When, however, the engagement is relatively complex, it is likely to require specialist competence in the quantification and reporting of water assets, water liabilities and changes in water assets and water liabilities, for instance, an assurance engagement involving a water report entity which has surface water and groundwater resources, as well as rights to water from outside the water report entity, with multiple organisations responsible for the management of water resources. Particular areas of expertise that may be relevant in such cases include:

1. Information systems expertise. For example, understanding how water information is generated, including how data is initiated, recorded, processed, corrected as necessary, collated and reported in a general purpose water accounting report.
2. Scientific and engineering expertise. For example:
   1. Mapping the flow of water in and out of a water report entity.
   2. Identifying the effect of uncertainty on the general purpose water accounting report.
   3. Knowledge of the quality control policies and procedures implemented by the responsible party and, where applicable, the party responsible for managing the water assets and water liabilities of the water report entity.
   4. Experience with specific types of water entities and related systems for measuring and reporting water assets, water liabilities and changes in water assets and water liabilities.
   5. The operation of physical meters and other quantification approaches, including modelling and estimation, and the selection of appropriate flow rate factors.

Preconditions for Accepting the Engagement

Determining the Appropriateness of the Subject Matter (Ref: Para. 16)

ASAE 3000 requires the assurance practitioner to determine whether the underlying subject matter is appropriate.^[23] In the case of a general purpose water accounting report, the water report entity's water assets, water liabilities and changes in water assets and water liabilities  are the underlying subject matter of the engagement. That underlying subject matter will be appropriate if, amongst other things, the water report entity's water assets, water liabilities and changes in water assets and water liabilities are capable of consistent quantification using suitable criteria.^[24]

Water volwnes may be quantified by:

1. Measurement (or monitoring) of water volumes and flow rates using metering, continuous water movement monitoring or periodic sampling;
2. Measuring a surrogate activity, such as water consumption;
3. Calculating water assets, water liabilities and changes in water assets and water liabilities using models and incorporating, for example, water report entity-specific flow factors, or average flow factors for a region, industry or process; or
4. Estimating volumes based on other available information and expected volwnes.

Determining the Suitability of the Criteria (Ref: Para. I8(a))

Suitable criteria exhibit the following characteristics: relevance, completeness, reliability, neutrality, and understandability.^[25]

Water Assets and Water Liabilities to be Accounted For (Ref: Para. IS(a)(i))

Determining the water assets and water liabilities to be included in a general purpose water accounting report will depend on various factors, including:

1. The nature of the water report entity, which may range from smaller, less complex entities to larger entities encompassing many water entities across jurisdictional borders.
2. Whether one party is accountable both for preparing and presenting the general purpose water accounting report and for managing the water assets and water liabilities being accounted for. Where the responsible party is accountable for preparing and presenting the general purpose water accounting report, but not accountable for managing some or all of the water assets and water liabilities being accounted for, it relies on the party (or parties) accountable for managing the water assets and water liabilities to provide information on water assets and water liabilities to be included in the general purpose water accounting report.
3. The types of water assets and water liabilities included within the water report entity.

Acceptable Quantification Approaches (Ref: Para. I 8(a)(ii))

AWAS 1 provides for the use of different quantification approaches for the various items presented in the water accounting statements, supported by note disclosures regarding the choice of approaches and whether they are in accordance with relevant quantification standards or established practices, the levels of accuracy or precision achieved by the quantification approaches and the sensitivities associated with the key assumptions used in the qualification approaches. ^[26]

3. How the responsible party determines whether previously reported water assets and water liabilities should be restated.

4. The categorisation of water assets and water liabilities in the general purpose water accounting report.
5. A statement regarding the uncertainties relevant to the quantification of the water assets, water liabilities and changes in water assets and water liabilities, including:
   1. their causes;
   2. how they have been addressed; and
   3. their effects on the general purpose water accounting report.

6. A statement regarding uncertainties relevant to the future prospects note in the general purpose water accounting report.
7. Information about unaccounted-for differences, if any, including the likely reasons for unaccounted-for differences, whether they are considered to be acceptable, the pattern of unaccounted-for differences over time and whether they are expected to continue in future reporting periods.
8. Changes, if any, in the matters mentioned in this paragraph or in other matters that materially affect the comparability of the general purpose water accounting report with a prior period(s).
9. Water assets and water liabilities relevant to the water report entity that have been excluded from the general purpose water accounting report, if any, and the reasons for their exclusion.

Who Developed the Criteria (Ref: Para. 18(b)(iii))

Where AWAS 1 is not used as the basis for preparing the general purpose water accounting report, or where AWAS 1 is supplemented by other criteria, it may not be clear who developed the criteria unless it is stated in the explanatory notes to the general purpose water accounting report.

The Responsible Party's Records (Ref: Para. lB(b)(iv))

As noted in paragraph A62(b), for some engagements concerns about the condition and reliability of the responsible party's records may cause the assurance practitioner to conclude that it is unlikely that sufficient appropriate evidence will be available to support an unmodified conclusion on the general purpose water accounting report. This may occur when the responsible party has little experience with the preparation of general purpose water accounting reports.

Agreement on the Terms of the Engagement (Ref: Para. 16, 20)

             ASAE 3000 requires that the assurance practitioner not agree to a change in the terms of the engagement where there is no reasonable justification for doing so.^[27] A request to change the scope of the engagement may not have a reasonable justification when, for example, the request is made to exclude certain water assets and water liabilities from the scope of the engagement because of the likelihood that the assurance practitioner's conclusion would be modified.